RJ100
Topic Author
Posts: 3895
Joined: Wed Nov 22, 2000 1:37 am

Austrian In Financial Trouble?

Sat May 27, 2006 6:49 am

Several media reports indicate that Austrian Airlines has severe financial problems. It also seems that Lufthansa is looking at it quite relaxed and prepares for a takeover (like they have done it with Swiss).

Any thoughts on this one? How do you see Austrians future?

I for myself see Austrian taken over by LH. But I think that OS will see a good future, being the Star Alliance's specialist for Eastern Europe.

Regards,
RJ100
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MaartenV
Posts: 261
Joined: Wed Aug 10, 2005 6:16 am

RE: Austrian In Financial Trouble?

Sat May 27, 2006 10:55 pm

Maybe they can merge Austrian with Swiss. This way LH could create a strong airline to cover the eastern and southern parts of Europe, with nice hubs like VIE and ZRH.
Its all about supply and demand...
 
Beaucaire
Posts: 3888
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RE: Austrian In Financial Trouble?

Sat May 27, 2006 10:59 pm

Austrian Media : AUA Runs Out Of Cash.... (by Beaucaire May 27 2006 in Civil Aviation)
Please respect animals - don't eat them...
 
PanHAM
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Joined: Fri May 06, 2005 6:44 pm

RE: Austrian In Financial Trouble?

Sat May 27, 2006 11:13 pm

A Swiss/Austrian merger is not possible until all third country traffic rights are negotiated by the EU (Switzerland has an agreement with the EU and would likely ride on the back of such treaties).

Sad to see that Austrian may loose it's independence. Their service is far superiuor than Lufthansas. LH just has to sit there and wait until the apple falls off the tree.
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RJ100
Topic Author
Posts: 3895
Joined: Wed Nov 22, 2000 1:37 am

RE: Austrian In Financial Trouble?

Sat May 27, 2006 11:19 pm

Quoting PanHAM (Reply 3):
LH just has to sit there and wait until the apple falls off the tree.

Exactly, Mr Mayrhuber several times said that they are just waiting and will be ready to take them over.
There's no reason why Lufthansa should buy them now- and pay for it while they can get it almost "for free" when OS runs out of money.

Regards,
RJ100
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Aleksandar
Posts: 2941
Joined: Sat Jul 29, 2000 11:43 pm

RE: Austrian In Financial Trouble?

Sat May 27, 2006 11:26 pm

Somehow I'm not surprised with that. It seems that takeover of NG was a bit too much for OS especially having in mind the huge fleet differencies.
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slz396
Posts: 1883
Joined: Tue Oct 02, 2001 7:01 am

RE: Austrian In Financial Trouble?

Sat May 27, 2006 11:27 pm

First LX
now apparently also OS
and mind you, SK is also not in a good financial health and could certainly do with some financial help from the German Flag Carrier.

I wonder:
Is LH going to actually BUY into all European Star alliance members?
 
RJ100
Topic Author
Posts: 3895
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RE: Austrian In Financial Trouble?

Sat May 27, 2006 11:34 pm

LH is just clever. The Swiss market is a good market (small but good) and OS's market is an excellent one (like Switzerland a limited home market but serving unique high yield destinations). LH will turn it profitable...and gain access to good markets.

Regards,
RJ100
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Beaucaire
Posts: 3888
Joined: Sun Sep 14, 2003 4:48 am

RE: Austrian In Financial Trouble?

Sat May 27, 2006 11:44 pm

Personally I would not buy all of them,since the growth-markets are not Scandinavia or Austria but Middle East,Asia and the developping countries.
Morocco will see a tremendous growth of passengers -like Ukraine ,Croatia,Russia,China and India.
The populations of Austria and Scandianvia are just too small to become strategically interesting,while the air-traffic market seems saturated.
Counties like Croatia or Ukraine-although relatively small in terms of population, offer a much bigger growth -potential though.
All counties without major visa-hussle are interesting for airlines ...
Algeria has a big potential-for instance-but due to it's requirement for visas (unobtainable at the airport like in Gulf-counties or Lebanon..),has restricted potential for short-term touristic visitors from France or Spain.
AUA has a great renomé for service and friendlyness of their crews.Personally I prefer fliying on AUA than on LH- but that's not sufficient for the beancounters.VIE is a 3 Million population market - one third of Cairo or one fifth of Mumbai.....
I would rather invest in Turkish Airlines or a Chinese Airline than in AUA - sorry -that's despite all the love I carry for the austrians...

[Edited 2006-05-27 16:45:26]

[Edited 2006-05-27 16:46:08]
Please respect animals - don't eat them...
 
cgnnrw
Posts: 1049
Joined: Tue May 17, 2005 3:11 am

RE: Austrian In Financial Trouble?

Sun May 28, 2006 1:30 am

Quoting PanHAM (Reply 3):
Their service is far superiuor than Lufthansas.

If call paying EUR2,50 for a 0,25 bottle of water in economy after paying EUR 388 for a 65 minute flight to Vienna superior......

Quoting Aleksandar (Reply 5):
Somehow I'm not surprised with that. It seems that takeover of NG was a bit too much for OS especially having in mind the huge fleet differencies.

I agree. They really screwed over Niki Lauda and treated Tyrolean like an unwanted step-child.....Well, AUA reaps what they sew.....
A330 man.
 
Leskova
Posts: 5547
Joined: Wed Oct 08, 2003 3:39 pm

RE: Austrian In Financial Trouble?

Sun May 28, 2006 1:44 am

Quoting Cgnnrw (Reply 9):
Quoting PanHAM (Reply 3):
Their service is far superiuor than Lufthansas.

If call paying EUR2,50 for a 0,25 bottle of water in economy after paying EUR 388 for a 65 minute flight to Vienna superior......

I've not had problems with getting a glass/cup of water for free on my recent flights on OS... and you can get tickets for much lower fares than €388...

Quoting Cgnnrw (Reply 9):
Quoting Aleksandar (Reply 5):
Somehow I'm not surprised with that. It seems that takeover of NG was a bit too much for OS especially having in mind the huge fleet differencies.

I agree. They really screwed over Niki Lauda and treated Tyrolean like an unwanted step-child.....Well, AUA reaps what they sew.....

Lauda primarily screwed himself and his airline - if he hadn't screwed up as much as he did, Lauda Air might still be independant.

Not sure if I'd like to see OS taken over by LH - just like with LX, it'll again be the purchase of a carrier that, except in size of the fleet and home-market, offers more than LH does.

But before I see OS either going down the drain, or even more downsized, or taken over by some other airline, I guess that LH is still the lesser of all evils available...
Smile - it confuses people!
 
PanHAM
Posts: 8649
Joined: Fri May 06, 2005 6:44 pm

RE: Austrian In Financial Trouble?

Sun May 28, 2006 4:21 am

Quoting Cgnnrw (Reply 9):

If call paying EUR2,50 for a 0,25 bottle of water in economy after paying EUR 388 for a 65 minute flight to Vienna superior......

I was referring to the C service which indeed is far superior to the equivalent LH offers and as a German resident you can get about the C fares on OS which LH sells only to residents outside Germany.

Y fares are usually cheaper than LH's as well. If you have to pay for a drink, why not. Still saves money.
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Bicoastal
Posts: 2446
Joined: Wed Oct 06, 1999 5:56 am

RE: Austrian In Financial Trouble?

Sun May 28, 2006 7:06 am

Are we talking an imminent death watch for Austrian or is this going to be an Italian/Brazilian death watch which could go on for years? Alitalia and Varig are unfortunately still around despite predictions of imminent ruin. Maybe Austrian is a better investment with harder working and less combative unions than the other two.
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PanHAM
Posts: 8649
Joined: Fri May 06, 2005 6:44 pm

RE: Austrian In Financial Trouble?

Sun May 28, 2006 6:13 pm

With the precedence set in Italy, the Austrian Government could easily put in some fresh money in form of equity.

The company knows what it has to do to shape things up and is on the road doing the right things. I'd say that they are in much better shape than their competitor on the southern side of the Alps.
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Aleksandar
Posts: 2941
Joined: Sat Jul 29, 2000 11:43 pm

RE: Austrian In Financial Trouble?

Mon May 29, 2006 9:34 am

Quoting Cgnnrw (Reply 9):
They really screwed over Niki Lauda

From the moment AUA took over Lauda Air, they had no idea what to do with them. Now, from some distance, it looks as that takeover was more a matter of pride than the sound business move.
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HAJFlyer
Posts: 1349
Joined: Fri Sep 16, 2005 7:34 pm

RE: Austrian In Financial Trouble?

Mon May 29, 2006 10:21 pm

Their CHF-denominated perpetual bond that is trading on the Swiss stock exchange has be relatively stable in the last few months; thus, at least a significant number of investors is convinced that AUA will make it.

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